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CDA LEGISLATIVE UPDATE

Initiative that Would Cripple Assessment-based Improvement Districts Pulled from the November Ballot

Backers of a pending statewide ballot measure and a coalition led by the state’s largest labor unions struck an eleventh hour legislative compromise this week that protects CDA’s members from a catastrophic impact that would have jeopardized hundreds of tenant-based improvement districts throughout California.

In response to new taxes placed on soda purchases at the retail level, the soda industry had sponsored an initiative that would have required every municipal tax, fee or assessment by a local agency – including BIA’s – to obtain a 2/3rds vote to be maintained. The impact to local government was severe and would have drastically altered the effectiveness of municipal government from delivering public services to residents like police, fire, libraries and community benefit programs.

Whether intentional or not, the initiative would have captured tenant-based improvement districts, BID’s, BIA’s and MADs by requiring a 2/3rds vote of the members of the district in order maintain the functionality of the district. CDA had taken an “oppose” position on the ballot measure and had joined a coalition including the League of California Cities, the California Professional Firefighters, and the Police Officers Research Association to push back on the soda industry’s measure while a potential legislative compromise was struck.

The legislative compromise contained in AB 1838 provides relief to the soda industry by banning municipalities from adopting taxes on soda for another 12 years through 2030. In turn, the initiative proponents agreed to pull the initiative from the November 2018 ballot. During the debate on the bill, lawmakers expressed their frustration – criticizing the soda industry specifically – yet supporting the compromise as a necessary choice to help safeguard public agency revenues, including the assessment models that CDA’s members rely on.

In his bill signing statement on the legislative compromise, Governor Jerry Brown stated, “Mayors from countless cities have called to voice their alarm and to strongly support the compromise which this bill represents.”

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